P11D Forms – Everything You Need to Know About P11D
Failure to comply with UK business law would result in fines and legal action taken against your company. This is especially paramount if you have employees. Therefore, it is essential as a business owner to understand the responsibilities you have as an employer. This includes P11D.
P11D is a statutory form you must submit to HMRC for each employee and director that is provided with additional expenses or benefits. To further clarify, if you provide any benefits in kind to your employees or if your employees submit expense claims that you reimburse you must notify HMRC by submitting a P11D form.
P11D is a statutory form that is required to be submitted by an employer on behalf of their employees to HMRC for a given tax year. This is to report employee benefits in kind and expenses which you, the employer, may have to pay additional tax on. Directors are not exempt from P11D and all director benefits in kind and expenses must also be reported via a P11D form to HMRC. This will determine how much additional tax and/or National Insurance needs to be paid for the expenses and benefits you’ve provided.
Alongside the P11D form submission, you will also need to submit a P11D(b) form. This informs HMRC how much Class 1A National Insurance is due on all the expenses and benefits you have given to your employees. This is 13.8% of the total amount.
What do you need to include in your submission?
An expense is an amount that incurs while performing duties at work and can be reimbursed from the company. Benefits in Kind are the non-monetary value that employers provide to their employees on top of their normal salary.
These are common examples of benefits and expenses:
- Company cars and fuel
- Mobile phones
- Private medical treatment or insurance
Some expenses and benefits in kind are exempt and therefore are not required to be reported in P11D. This exemption is typical when the employer pays the actual cost incurred in expense claims. If you are uncertain you should always consult the Government guide on Expenses and Benefits or contact your accountant.
How to submit the P11D form?
If you are submitting your P11D form instead of your accountant or payroll provider, you can submit your form in the following ways:
- Through payroll software
- PAYE Online Service
- HMRC Online End of Year Expenses and Benefits forms
- Hard copy/paper form
What information do you need to put in when filing P11D?
In completing the P11D’s of your employees, you should prepare the following information:
- Employer name
- PAYE reference
- Employee name
- National Insurance number
- Date of birth
- Details of the benefits provided (e.g. cash equivalent/cost)
If you have provided an employee with a company car, you’d have to prepare the following information to calculate the cash equivalent.
- Model of the car
- Approved CO2 emissions figure for cars registered on or after 1 January 1998
- Type of fuel or power used
- The list price of the car (including car and standard accessories only)
- Car availability
- Date first registered
To get the total cash equivalent of the car, you need to multiply the list price of the car by the approved CO2 emissions. You should always work with your accountant or payroll expert to calculate the cash equivalent of certain benefits to ensure you submit the correct amount.
Employers are required to submit the P11D and P11D(B) forms on the 6th of July following the end of the tax year as well as giving individual copies for each employee.
Employees should be given a copy of their form if they require it for their Self-Assessment Tax Return.
Class 1A National Insurance is due to be paid on the 19th of July following the submission if paid via post or the 22nd of July if paid electronically.
It is advisable to make payments electronically rather than via post as this is easier, more secure and avoids potential delays.
Fines and penalties
As an employer, it is your responsibility to make sure that you meet the submission and payment deadlines. If you miss either of these deadlines as you may incur late payment penalties or interest.
As per HMRC, you’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late.
Fines and penalties are not just for late filing or payments. You may face this consequence if you intentionally ignore submission or if you submit incorrect information.
P11D can be a complex and complicated task for business owners that attempt to file their submissions without expert payroll assistance and support. Not only can it be very time-consuming but you must understand HMRC’s rules surrounding benefits and exceptions. If you are finding the process to be challenging, the most efficient way to deal with P11D is to enlist the help of your accountant or payroll provider to handle and prepare everything for you. Then you can be reassured that you won’t have to face any future fines or consequences.